TIDMXTR
RNS Number : 1878O
Xtract Resources plc
29 September 2023
For immediate release
29 September 2023
Xtract Resources Plc
("Xtract" or "the Company")
Unaudited Interim Results for the six months ended 30 June
2023
Xtract Resources Plc (AIM: XTR), the gold producer, exploration
and development company with projects in Australia, Mozambique and
Zambia, announces its unaudited interim results for the six months
ended 30 June 2023 ("Period").
Highlights
Operational
-- An updated mining study completed on the Bushranger project
by Optimal Mining Solutions (Pty) Ltd reported that the project
could potentially generate significant cash margins using the
20mtpa and 25Mtpa model on 16 economic pit shells modelled from an
operating cost perspective only with capital cost requirements
excluded
-- A pre-concentration study using TOMRA advanced optical
sorting technology achieved a grade uplift of 52%, and a mass
rejection of 62% of unmineralised material, on composite
mineralized drill samples from the Bushranger project excluding a
higher-grade outlier, indicating the project is well suited to ore
pre-concentration, with positive financial impacts on a future
mining operation at the project
-- Production continued at the Manica Fair Bride project with
production results published for the first quarter ended 31 March
2023
-- A total of 140kg of gold was produced from the Fair Bride
operation during quarter ended 31 March 2023, of which Xtract has a
claim to 23% of profits
-- Following the prolonged rainy season in Mozambique,
production gathered pace in the second quarter ended 30 June 2023
with projected figures for this second quarter on target
-- Work is underway at Xtract's newly acquired Kakuyu project in
Zambia, including the delineation of two large surface anomalies
adjacent to the historic Kakuyu pit, with a combined strike length
of over 2km of prospective ground for immediate follow-up surface
work
-- Reconnaissance work is continuing at Kakuyu to determine
potential resources within the old waste dumps and to reveal
mineralisation at the base of the pit, while improving access to
the old open pit via a ramp push back exercise
-- Post period end, the Company entered into a Joint Venture
agreement with Coopermelon Limited, to earn a 65% interest in two
licences prospective for copper mineralisation in northwest Zambia.
The licences are underexplored to date and an initial two-year
period will see exploration expenditure of at least US$2 million on
the property, starting in late 2023
Financial
-- Revenue from gold sales of GBP0.39m (H1 2022: GBP0.97m)
-- Other revenue of GBP1.67m (H1 2022: GBP11k)
-- Net Profit /(loss) of GBP0.62m (H1 2022: loss of GBP0.03m)
-- Administration & operating expenses GBP1.05m (H1 2022:
GBP1.33m (including a share-based payment charge of GBP1.47m))
-- Cash of GBP0.38m (FY 2022: GBP1.24m)
-- Net assets of GBP21.73m (FY 2022: GBP21.15m)
Operational Overview
At the Bushranger copper-gold project located in the Lachlan
Fold Belt of New South Wales the previous reporting period saw the
delineation of an upgraded mineral resource of 512Mt @ 0.22% CuEq,
at a cut-off of 0.1% CuEq, at the Racecourse prospect, and a maiden
mineral resource of 87Mt @ 0.22% CuEq, at a cut-off of 0.1% CuEq,
at the Ascot prospect, for a combined total of 599Mt @ 0.22% Cu.
Work on the Bushranger project has continued during the current
reporting period, allowing for reflection of the Phase Two drilling
programme, consolidation of results and ongoing assessment of the
economics for a profitable mining operation.
An updated open-pit mining study was completed by Optimal Mining
Solutions (Pty) Ltd ("Optimal Mining") to update the previous
mining study and examine the economics of 20Mpta and 25Mpta open
pit mining operation. Sixteen economic pit shells were modelled
from an operating cost perspective with capital cost requirements
excluded and which highlighted that the 20Mtpa and 25Mtpa open pit
options potentially generate significant operating cash margins
dependent upon mining rate, copper price and cut-off grade.
It was highlighted that the project may benefit from optical
mineral sorting enabling the economics of the processing operation
to be heightened with a reduction in feedstock and increased grade.
Xtract engaged TOMRA Sorting Solutions ("TOMRA") of Sydney,
Australia, to undertake the pre-concentration test work on five
composite drill samples.
All five composite drill core samples included in the study
achieved upgrades to the copper and gold content of the
pre-concentrated ore, while rejecting significant volumes of waste
material. The average original grade of the four samples of
copper-gold mineralisation excluding one higher grade outlier was
0.23% Cu, while the average grade of the pre-concentrated
mineralisation was 0.35% Cu, which shows a grade uplift of 52%. The
average mass yield was 36%, meaning that 64% of the original mass
of the sample was rejected into the waste product, suggesting that
it will be possible to greatly reduce the volume of material needed
to be processed through the milling and floatation circuits of a
processing plant.
At Manica, total gold production for the three-month period
ended 31 March 2023 ("Q1 2023") was 140kg, an increase on the
previous reporting period, and of which Xtract holds a 23% share.
Month-on-month gold production has increased from 37.6Kg in January
2023 to 66.3Kg in May 2023. Fair Bride's average gold sale price
for Q1 2023 was US$1,859 per ounce.
Clear indications are that post the heavy rains, results are
improving significantly and production for the three months ended
30 June 2023 ("Q2 2023") are expected to show a marked improvement
with plant throughput increasing from 30,000 tonnes per month in Q1
2023 to current nameplate capacity of more than 40,000 tonnes per
month.
Application of a more robust grade control process has also
resulted in a marked improvement in run of mine grade delivered to
the plant and mill running time has increased from 67.3%
availability in the current quarter (ending 30 September 2023) to a
reported 82% availability in May 2023.
Work is underway at the company's new Kakuyu project in Zambia,
with initial ground exploration defining large areas of prospective
ground adjacent to the historic Kakuyu Hill open pit mine. On the
southern side of Kakuyu Hill an approximate combined 800m west and
east striking extension of copper mineralisation has been
postulated, and on the northern side, a substantial copper in soil
anomaly extends over an east west strike length of approximately
1.4km which is coincident with a hydrothermal breccia. Both targets
require further surface works and drilling.
Potential exists for a small resource of copper associated with
historical waste dump material that would have historically been
considered low-grade and an assessment is underway to assess their
importance.
Further work at Kakuyu concerns access to the historic pit with
a push back improving ramp access and exposure to ore at the base
of the pit. Additionally, a 250t bulk sample has been sent for
processing at the Kabwe Refinery for drying, crushing and sampling
ahead of negotiations for the future processing of ore production,
with further samples also sent to an external processing consultant
for metallurgical test work.
Following the period end, the Company entered into a Joint
Venture agreement with Coopermelon limited to earn an initial 65%
interest in two licences in Northwestern Zambia prospective for
potentially high-grade Kamoa style mineralisation at depth and
lower grade bulk-tonnage mineralisation at surface. There has been
little exploration to date and the Xtract intends to spend an
initial US$2 million over a two-year "Phase-One" exploration
period, starting with surface reconnaissance works in late
2023.
Summary of Company Projects
Australia
Bushranger Project
The Bushranger project rapidly advanced during the previous
reporting period, seeing the completion of the Phase Two drilling
programme and ending with the release of an upgraded mineral
resource for the Racecourse prospect and a maiden mineral resource
for the Ascot prospect. Following the rapid advancement of work on
the project during the previous reporting period, 2023 saw a period
of quieter reflection on results and advances towards determining a
saleable mined product from the project.
Open-Pit Mining Study
In the first quarter Xtract contracted independent consultants
Optimal Mining Solutions (Pty) Ltd ("Optimal Mining") to update the
previous mining study and examine the economics of 20Mpta and
25Mpta open pit mining operations on the Bushranger Copper-Gold
Project.
Sixteen economic pit shells were modelled from an operating cost
perspective only with capital cost requirements excluded and which
highlighted that the 20Mtpa and 25Mtpa open pit options potentially
generate significant operating cash margins dependent upon mining
rate, copper price and cut-off grade.
As processing of the Racecourse prospect ore contributes between
49% and 61% of the total production costs across the 16 cases
examined, it was identified that the Racecourse prospect copper
mineralisation may be well suited to pre-concentration, providing
opportunities to streamline mining and processing, with positive
impacts on metal recoveries, capital and operating costs through
the use of sorting technology.
Optimal Mining identified a project with similar grades to
Racecourse where pre-concentration reduced the amount of material
to be concentrated up to approximately 50%, significantly reducing
pre-production capital and operating costs and the decision was
made to continue with a pre-concentration study.
Pre-Concentration Study
Post year end positive results of the pre-concentration study
were received, which entailed the sorting of the ore using TOMRA
technology which utilises X-Ray transmission and machine learning
to sort mineralisation into a pre-concentrated ore product and
waste.
Xtract engaged TOMRA Sorting Solutions ("TOMRA") of Sydney,
Australia, to undertake the pre-concentration test work on five
composite drill samples. Data was collected using TOMRA's COM X-Ray
Transmission ("XRT") system which detects mineralised particles and
then sorts the material into a pre-concentrated product and waste
using amplified mechanical, hydraulic or pneumatic processes. The
sorter is set up / trained using images taken of the samples. The
images are then analysed using proprietary TOMRA image processing
software. Based upon the images, sorting task specific algorithms
are then developed and applied to sorting the mineralised
material.
All five composite drill core samples included in the study
achieved upgrades to the copper and gold content of the
pre-concentrated ore, while rejecting significant volumes of waste
material. Excluding one of the higher-grade samples as an outlier,
the average original grade of the four samples of copper-gold
mineralisation was 0.23% Cu, while the average grade of the
pre-concentrated mineralisation was 0.35% Cu, which shows a grade
uplift of 52%. The average mass yield was 36%, meaning that 64% of
the original mass of the sample was rejected into the waste
product, suggesting that it will be possible to greatly reduce the
volume of material needed to be processed through the milling and
floatation circuits of a processing plant.
The outlying sample had the highest original feed grade of 0.51%
Cu and upgraded well with TOMRA treatment, but achieved lower metal
recoveries due to higher metals content in waste fractions,
suggesting that pre-concentration may not be as effective for
higher-grade ore. This suggests that higher-grade material may not
benefit from ore sorting to the same extent as the more typical
deposit grades and would be more suited to direct processing.
The results overall show the potential of the TOMRA system to
significantly increase the copper grade into a pre-concentrated
product while rejecting potentially over 50% of the original rock
mass into waste. The variability of the results indicate that more
samples would need to be tested in order to determine an accurate
average overall effect for TOMRA pre-concentration.
The pre-concentration results are sufficiently positive for the
effects of TOMRA pre-concentration to be incorporated into the
overall financial model for the Bushranger Project. Consequently,
Xtract has engaged Optimal Mining Solutions (Pty) Ltd of Australia
("Optimal Mining") to incorporate the TOMRA results into an updated
economic model for the overall Bushranger Project.
Table 1: Bushranger Prospect Drill Samples Submitted for TOMRA
Analysis
Run Drill Hole From (m) To (m) Interval (m) Cu%
1 BRDD_21_036 61.00 89.00 28.00 0.20
2 BRDD_21_010 180.00 198.00 18.00 0.24
3 BRDD_21_022 290.00 308.00 18.00 0.25
4 BRDD_21_021_B 227.00 243.00 16.00 0.56
5 BRDD_21_021_A 173.00 187.00 14.00 0.21
Table 2: Bushranger Prospect Drill Samples Results of TOMRA
Analysis
Run Number 1 2 3 4 5 Avg. Avg. (excl. high grade run 4)
Cu Grade of Original Sample (Cu%) 0.20 0.24 0.25 0.56 0.21 0.29 0.23
Back Calc. Original Grade (Cu%)* 0.15 0.26 0.32 0.52 0.20 0.29 0.23
Product Grade (Cu%) following
Pre-Conc. 0.35 0.35 0.41 0.94 0.30 0.47 0.35
Waste Grade (Cu%) 0.067 0.20 0.23 0.50 0.16 0.23 0.16
Original Mass (Kg) 22.5 32.7 10.5 13.7 11.9 18.3 19.4
Pre-Conc. Product Mass (Kg) 7.1 12.2 5.1 0.7 3.3 5.68 6.9
Waste Mass (Kg) 15.4 20.5 5.4 13 8.6 12.6 12.5
Original Contained Cu (kg) 3.4 8.5 3.4 7.1 2.4 5.0 4.4
Pre-Conc. Product Contained Cu
(kg) 2.4 4.2 2.1 0.66 1.0 2.1 2.4
Mass Yield (%) 31.6 37.3 48.6 5.1 27.7 30.0 36.3
Metal Recovery (%) 72.6 49.6 62.1 9.3 32 45.1 54
*Back calculation of initial Cu grade from final product for
mass balance purposes.
Mozambique
Gold production has continued on the Manica project, with Fair
Bride now the leading project, in which Xtract has a 23% share of
net profit. Fair Bride gross gold production continued to increase
during Q1 2023 and was 140Kg (equivalent to 4,552 ounces).
Month-on-month gold production has increased from 37.6Kg in January
2023 to 66.3Kg in May 2023. Fair Bride's average gold sale price
for Q1 2023 was US$1,859 per ounce.
Revenue and therefore Xtract's share of net profit was impacted
by two main factors during Q1 2023. Operation through the first
rainy season in Manica resulted in a shortfall in plant throughput
as wet clay-rich near-surface mined material affected the operating
efficiencies of both screens and the mill. Measures have been put
in place to alleviate the problem and the impact of improvements
can already be seen with the month-on-month ore processing figure
rising from 30,000 tonnes per month in February 2023 to a current
reported estimate of approximately 43,000 tonnes per month in May
2023.
A significant amount of additional close-spaced drilling was
completed during Q1 2023 specifically to improve grade control and
the ability to better predict the run of mine grade that could be
anticipated by the processing plant. This work had an almost
immediate impact on improvement in the run of mine grade with the
average rising from 1.2g/t Au in February 2023 to a current
reported grade for May 2023 of approximately 1.8g/t Au. An increase
in grade equivalent to an additional $36 per tonne of ore delivered
to the plant at the current gold price could also have a
significant positive impact on revenue and margin.
Table 3: Gold Production and sales prices - Fair Bride
(Xtract 23% share of net profit)
Q1 2023
Tonnes Mined & Processed
(tons) 107,023
Average grade (g/t) 1.51
Au Production (ounces) 4,522
Au recovery (%) 87.70
Average sales price
per ounce in US$ 1,859
Cost per oz of Au (US$) 1,185
For the other projects at the Manica Concession, including the
Alluvial and other hard rock production, Xtract is entitled to a
percentage share of the gold produced. The total gold production
for these the other Manica Projects in Q1 2023 was 36Kg (equivalent
to approximately 1,156 ounces) of which the Xtract's share was 183
ounces. The average gold sales price for the other projects in Q1
2023 was US$.1,812 per ounce.
Manica Project Background
Mozambique is recognised as a stable mining jurisdiction within
a favourable political and legal regime. The Manica Gold Project is
situated in the Odzi-Mutare-Manica Greenstone belt, with an
estimated 2 million ounces of gold previously mined in the
area.
The Fair Bride Project is an open pit and underground project
with a combined SAMREC compliant resource of 1.262 million ounces
(including 782k ounces Measured and Indicated). In 2019, the
Company was given the opportunity to move the Fair Bride Project
forward, from development stage to production through a
collaboration agreement with Mutapa Mining and Processing LDA ,
thereby mitigating any execution risk to Xtract.
At the end of June 2022 production on the Fair Bride project
commenced with the introduction of low-grade ore to commission all
parts of the processing circuit.
Zambia
Kakuyu Project
Towards the close of the previous reporting year Xtract entered
into a joint venture agreement with Oval Mining Limited relating to
the exploitation of small-scale production licence 29805-HQ-SML.
Under the terms of the Agreement, Xtract and Oval have agreed that
the net profit of the Kakuyu Project will accrue as to 60% to
Xtract and 10% to Oval, with the balance of 30% accruing to Kakuyu
Mining Limited, the licence holder.
The Kakuyu Project is located approximately 53km north-west of
the town of Mumbwa, Central Province of Zambia, in a region
well-known for mining including the nearby mines and occurrences of
Sable Antelope, True Blue, Crystal Jacket, Maurice F Gifford, Lou
Lou, Silverking and Kamiyobo. The most recent discovery is the Iron
Oxide Copper Gold ("IOCG") Kitumba project (BHP/Blackthorn
Resources).
The Kakuyu Project has been operated at various times in the
past by both small-scale commercial and artisanal miners. There has
been limited exploration to date of the Kakuyu Project which
provides Xtract with an opportunity to make fresh discoveries in an
under-explored but prospective region. The Kakuyu Project is
centred around the Kakuyu Hill pit and a large hematitic lens
(approximately 800 by 200 metres) found in a fault-controlled
setting which is understood either to be a shear hosted Cu-Au
deposit or an oxidised post orogenic IOCG deposit, or a combination
thereof. The extension of the lens feature is not well understood
at depth, and potential exists in the wider licence where field
investigations showed similar features, structures and alteration
adjacent to the pit.
Work Completed During Reporting period
Exploration undertaken in and around the Kakuyu open pit has
defined several copper targets offering potential for extension of
the existing in-pit mineralisation and a significant increase in
the projected life of mine. On the southern side of Kakuyu Hill an
approximate combined 800m west and east striking extension of
copper mineralisation has been postulated that requires validation
through sampling and drilling. On the northern side of Kakuyu Hill,
a substantial copper in soil anomaly extending over a strike length
east to west of approximately 1.4 kilometres has been defined which
is coincident with a hydrothermal breccia of the same composition
as that hosting mineralisation in the open pit.
An assessment of waste dumps by the grade control team is under
way to identify potential additional mineral resources presumed by
previous operators to be low-grade or waste material. A programme
of sampling is in progress and additional feedstock may be
generated.
A detailed assessment and inventory of ore currently stored on
the ROM pad is in progress to develop a grade control and ore
blending plan to ensure the delivery of consistent tonnage and
grade output.
Advancements towards a future mining operation have progressed,
with work under way to push back the existing ramp access to the
pit to expose in-pit extensions of higher-grade (targeting >2.0%
Cu) ore providing additional feedstock whilst simultaneously
improving pit access. In addition, a 250t bulk sample has been
delivered to the Kabwe Refinery for drying, crushing and sampling
ahead of negotiations for the future processing of ore production,
with samples also sent to an external processing consultant for
metallurgical test work.
The Company is now sourcing a drill rig to test the potential
extensions to mineralisation associated with the existing open pit
together with the substantial soil anomaly delineated along the
northern boundary of Kakuyu Hill.
New Acquisition
Post period end, the Company announced that it had entered into
a Joint Venture agreement with Cooperlemon consultancy Limited in
relation to the exploration for copper at large scale exploration
licenses 29123-HQ-LEL and 30459-HQ-LEL in Northwest Zambia.
Under the Joint Venture agreement Xtract has agreed the
following key terms:
Earn-in and Phase 1 exploration budget: Xtract will earn a 65%
interest in the joint venture by funding exploration expenditure
over an initial two-year period ("Phase 1") on the Licences of not
less than US$2 million. Exploration is expected to commence in Q4
2023 and will comprise both physical activity within the Licence
boundaries (including but not limited to mapping, soil
geochemistry, geophysics and drilling), and desktop studies,
laboratory analysis and interpretation of data and results. Xtract
anticipates funding this exploration expenditure from existing
resources and current ongoing operational activities.
If the Phase 1 exploration results are successful and prove the
continuity of mineralisation at grades suggesting the potential for
the future development of a Mineral Resource of not less than
500,000 tonnes of contained copper, consistent with economic
recovery at the depth of discovery with a minimum internal rate of
return of not less than 25% and a payback period not exceeding 42
months (including the recovery of capital expenditure), then there
will be a second two year exploration period ("Phase 2").
Phase 2 exploration budget: The Phase 2 exploration expenditure
of US$3 million will also be funded by Xtract who will be the
operator of the Licences for the duration of the Agreement.
Consequence of Trade Sale: If there is a trade or any other sale
of the Licences and / or the Joint Venture during Phase 1 of the
joint venture then Xtract will be deemed to have a 55% interest in
the Joint Venture. A sale requires the agreement of both Xtract and
Cooperlemon.
Mine Development: In the event that either or both of the
licences advance to a point where they are commercially viable and
suitable for development then the licences will be moved to a
corporate entity to be owned 75% by Xtract and 25% by Cooperlemon,
and it will be the responsibility of the newly formed corporate
entity to raise all capital for mine development and future
operations.
The two licences cover a combined 107,000 hectares area covering
ground in a highly prospective part of Northwest Zambia where
competition for exploration licences is acute. The Company believes
there is scope for the discovery of potentially high-grade
Kamoa-style mineralisation at depth and lower grade bulk tonnage at
or near-surface. There has been limited exploration to date and
initial fieldwork will commence in September on the two licences
with a view to defining potential drill targets as soon as
possible.
Licence No: 29123-HQ-LEL, which comprises 88,149 hectares and
expires on 7 September 2025, is held by Oval Mining Limited
("Oval"). The application for Licence 30459-HQ-LEL, which comprises
19,600 hectares and which has been approved for issue by the
Zambian Mining Cadastre, is held by Far North Enterprises Limited
("Far North"). Both licences are located in North-West Zambia
adjacent to the Democratic Republic of Congo (DRC) border. Oval and
Far North have each agreed with Xtract to be bound by the terms and
the conditions of the JV Agreement with Cooperlemon (who is acting
on their behalf) as though they were a party to the JV
Agreement.
Financial
During the Period, other revenue which relates to Xtract's
profit from Fair Bride amounted to GBP1.67m. Administration
expenses for the Group amounted to GBP1.05m (H1 2022 - GBP1.33m).
Non-operating income for the period amounted to GBPnil (H1 2022-
0.49m) and comprised primarily of fees invoiced within the group to
third parties.
Enquiries :
Xtract Resources Colin Bird, Executive +44 (0)20 3416
Plc Chairman 6471
Beaumont Cornish Roland Cornish
(Nominated Adviser Michael Cornish
and Felicity Geidt +44 (0)20 7628
Joint Broker) Email: corpfin@b-cornish.co.uk 3369
Novum Securities
Limited +44 (0)207 399
(Joint Broker) Colin Rowbury/Jon Belliss 9427
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR"). The person who arranged for the release of this
announcement on behalf of the Company was Joel Silberstein,
Director.
Further details are available from the Company's website which
details the company's project portfolio as well as a copy of this
announcement: www.xtractresources.com
Xtract Resources PLC
Consolidated Income Statement
For the six month period ended 30 June 2023
Six months ended Year ended
31 December
30 June 2023 30 June 2022
Unaudited 2022 Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue from Gold sales 5 393 972 2,110
Other revenue 5 1,669 11 -
Other non-operating income - 494 702
Administrative and operating
expenses (1,051) (1,332) (3,038)
------------ ------------------------ -----------
Direct Operating (601) (715) (1,686)
Other Operating (87) (82) (122)
Administration (363) (535) (1,230)
------------ ------------------------ -----------
Project expenses (426) (214) (1,430)
Operating profit/(loss) 585 (69) (1,656)
Other gains and losses - - -
Finance (cost)/income 37 93 110
------------ ------------------------ -----------
Profit/(loss) before tax 622 24 (1,546)
Taxation (1) (52) (283)
------------ ------------------------ -----------
Profit/(loss) for the period
from continuing operations 3 621 (28) (1,829)
Profit/(loss) for the period 6 621 (28) (1,829)
------------ ------------------------ -----------
Attributable to:
Equity holders of the parent 621 (28) (1,829)
Net (loss)/profit per share
Basic (pence) 6 (0.07) (0.00) (0.22)
============ ======================== ===========
Diluted (pence) 6 (0.07) (0.00) (0.22)
============ ======================== ===========
Xtract Resources PLC
Consolidated statement of comprehensive income
For the six month period ended 30 June 2023
Six months ended Year ended
30 June 31 December
2023 30 June 2022
Unaudited 2022 Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit /(Loss) for the period 621 (28) (1,829)
---------- --------------- -------------
Other comprehensive income
Items that will not be reclassified
subsequently to profit and loss
Exchange differences on translation
of foreign operations (716) 550 343
Other comprehensive income/(loss)
for the period (716) 550 343
Total comprehensive (loss)/income
for the period (95) 522 (1,486)
Attributable to:
Equity holders of the parent (95) 522 (1,486)
(95) 522 (1,486)
========== =============== =============
Xtract Resources PLC
Consolidated Statement of Financial Position
As at 30 June 2023
30 June 31 December
30 June 2022 2022 Audited
2023 Unaudited Unaudited GBP'000
Notes GBP'000 GBP'000
Non-current assets
Intangible Assets 7 18,608 19,760 19,418
Property, plant & equipment 8 75 45 40
Other financial assets - - -
18,683 19,805 19,458
Current assets
Trade and other receivables 2,556 1,636 1,342
Inventories 119 14 123
Cash and cash equivalents 375 1,239 192
3,050 2,889 1,657
Total assets 21,733 22,694 21,115
--------------- ---------- -------------
Current liabilities
Trade and other payables 1,473 1,350 759
Other loans 50 94 50
Current tax payable 297 - 312
1,820 1,444 1,121
Non-current liabilities
Environmental rehabilitation
provision 326 - 312
326 - 312
Total liabilities 2,146 1,444 1,433
Net current assets/(liabilities) 1,230 1,445 536
Net assets 19,587 21,250 19,682
=============== ========== =============
Equity
Share capital 9 4,975 4,974 4,975
Share premium account 71,978 71,786 71,978
Warrant reserve 304 432 304
Share-based payments reserve 2,122 1,874 2,121
Fair Value reserve - - -
Foreign currency translation
reserve (65) 858 651
Accumulated losses (59,727) (58,674) (60,347)
Equity attributable to equity
holders of the parent 19,587 21,250 19,682
Total equity 19,587 21,250 19,682
=============== ========== =============
Xtract Resources PLC
Consolidated statement of changes in equity
As at 30 June 2023
Share Share Warrant Share-based Fair Foreign Accumulated Total
Capital premium reserve payments value currency losses Equity
GBP'000 account GBP'000 reserve reserve translation GBP'000 GBP'000
GBP'000 GBP'000 GBP'000 reserve
GBP'000
-------- ------------- ------------- -------------- -------- -------------- -------------- ----------
Balance at 31
December 2021 4,973 71,684 467 1,874 - 308 (58,646) 20,660
-------- ------- --------------- ------------ -------------- -------- ---------------- -----------
Loss for the
period - - - - - - (28) (28)
Foreign
currency
translation
difference - - - - - 550 - 550
Issue of
Shares 1 67 - - - - - 68
Exercise of
warrants - 35 (35) - - - - -
-------- ------- --------------- ------------ -------------- -------- ---------------- -----------
Balance at 30
June 2022 4,974 71,786 432 1,874 - 858 (58,674) 21,250
-------- ------- --------------- ------------ -------------- -------- ---------------- -----------
Loss for the
period - - - - - - (1,801) (1,801)
Issue of
Shares 1 192 - - - - - 193
Foreign
currency
translation
difference (207) - (207)
Share issue - - - - - - - -
costs
Issue of share
options - - - 247 - - - 247
Expiry of
warrants - - (128) - - - 128 -
Exercise of - - - - - - - -
warrants
Balance at 31
December 2022 4,975 71,978 304 2,121 - 651 (60,347) 19,682
-------- ------- --------------- ------------ -------------- -------- ---------------- -----------
Profit/(loss)
for the
period - - - - - - 621 621
Foreign
currency
translation
difference - - - - - (716) - (716)
Issue of - - - - - - - -
Shares
Exercise of - - - - - - - -
warrants
Balance at 30
June 2023 4,975 71,978 304 2,121 - (65) (59,726) 19,587
======== ======= =============== ============ ============== ======== ================ ===========
Xtract Resources PLC
Consolidated Statement of Cash Flows
For the six month period ended 30 June 2023
6 months
period ended 6 months Year ended
30 June period ended 31 December
2023 30 June 2022 2022
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
Net cash used in operating activities 10 330 (1,732) (2,530)
------------- ------------- -------------
Investing activities
Acquisition of intangible fixed
assets (56) (2,555) (2,868)
Acquisition of tangible fixed assets (43) (26) (27)
Net cash from/(used in) investing
activities (99) (2,581) (2,895)
-------------
Financing activities
Proceeds on issue of shares - 68 261
Proceeds from borrowings - - 50
Net cash from financing activities - 68 311
-------------
Net increase/(decrease) in cash
and cash equivalents 231 (4,245) (5,114)
Cash and cash equivalents at beginning
of period 192 5,389 5,389
Effect of foreign exchange rate
changes (49) 95 (83)
-------------
Cash and cash equivalents at end
of period 374 1,239 192
------------- ------------- -------------
Xtract Resources PLC
Notes to the interim financial information
For the six month period ended 30 June 2023
1. General information
Xtract Resources PLC ("Xtract") is a company incorporated in
England and Wales under the Companies Act 2006. The Company's
registered address is 1(st) Floor, 7/8 Kendrick Mews, London, SW7
3HG. The Company's ordinary shares are traded on the AIM market of
the London Stock Exchange. The Company invests and engages in the
management, financing and development of early-stage resource
assets.
2. Accounting policies
Basis of preparation
Xtract prepares its annual financial statements in accordance
with UK-adopted international accounting standards and in
conformity with the Companies Act 2006.
The consolidated interim financial information for the period
ended 30 June 2023 presented herein has been neither audited nor
reviewed. The information for the period ended 31 December 2022
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006 but has been derived from those accounts.
The auditor's report on those accounts was not qualified and did
not contain statements under section 498 (2) or (3) of the
Companies Act 2006. As permitted, the Group has chosen not to adopt
IAS 34 'Interim Financial Reporting'.
The Interim financial information is presented in pound sterling
and all values are rounded to the nearest thousand pounds (GBP'000)
unless otherwise stated.
The interim consolidated financial information of the Group for
the six months ended 30 June 2023 were authorised for issue by the
Directors on 29 September 2023.
Going concern
As at 30 June 2023 the Group held cash balances of GBP375K. A
small operating loss has been reported for the Group, however, as
at the date of the release of the consolidated financial
information, the Group's assets have been and continue to generate
revenues. The Group has continued with its exploration activities
in Australia and recently completed the Phase Two drilling
programme at the Racecourse Prospect.
The Directors have assessed the working capital requirements for
the forthcoming twelve months and have undertaken the following
assessment.
Management have reviewed the cash flow projections for the
forthcoming twelve months, based on the current operations in
Mozambique, Australia, Zambia as well as the corporate overhead.
The Group expects production at Fair Bride to continue at current
levels during the coming months with the Group receiving 23% share
of net profit after tax. The gold mined at Manica projects other
than Fair Bride has significantly scaled down as the mineable
resource for these projects is significantly reduced. Their
contribution to the Group's revenues has decreased from the prior
years.
Based on the assumption that Fair Bride operates within its
targeted parameters and no new business is consummated, the
Directors do not anticipate the need for funds to be raised in the
twelve-month period from the date of authorising the consolidated
information.
As is common with junior mining companies, the Company in the
past has raised finance from shareholders for its activities, in
discrete tranches to finance its activities for limited periods
only and further funding would be required from time to time to
finance those activities.
The Directors therefore continue to adopt the going concern
basis of accounting in preparing the consolidated financial
information and therefore the consolidated financial information
does not include any adjustments relating to the recoverability and
classification of assets and liabilities that may be necessary if
the going concern basis of preparation of the consolidated
financial information is not appropriate.
On this basis the Board believes that it is appropriate to
prepare the consolidated financial information on the going concern
basis.
Changes in accounting policy
The accounting policies applied are consistent with those
adopted and disclosed in the Group Consolidated financial
statements for the year ended 31 December 2022, except for the
changes arising from the adoption of new accounting pronouncements
detailed below.
There are no amendments or interpretations to accounting
standards that would have a material impact on the financial
statements.
3. Business segments
Segmental information
The divisions on which the Group reports its primary segment
information are reported to its Executive Chairman, who is the
Chief Operating Decision maker of the Group. The Executive Chairman
and the Chief Operating Officer are responsible for allocating
resources to the segments and assessing their performance.
Principal activities are as follows:
-- Operating alluvial gold & hard rock mining segment -
Mozambique
-- Mine Development - Mozambique
-- Exploration
-- Investment and other
Segment results
6 months ended Mine Investment Alluvial Gold
30 June 2023 Development Exploration And Other Mining Production
(Continuing) (Continuing) (Continuing) (Continuing) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue
Sale of gold bars - - - 393 393
Less: Cost of - -
sales - - -
---------------- --------------- --------------- -------------------- ---------------
Segment Gross
profit - - - 393 393
---------------- --------------- --------------- -------------------- ---------------
Other operating
income - - 1,669 - 1,669
Administrative
and
operating
expenses - (94) (352) (605) (1,051)
Project costs - (184) (34) (208) (426)
---------------- --------------- --------------- -------------------- ---------------
Segment result - (278) 1,283 (420) 585
---------------- --------------- --------------- -------------------- ---------------
Other gain and - - - -
losses -
Finance costs - 47 (10) 37
--------------- --------------- -------------------- ---------------
(Loss)/profit before
tax (278) 1,330 (430) 622
Tax - - - (1) (1)
---------------- --------------- --------------- -------------------- ---------------
(Loss)/profit for
the period (278) 1,330 (431) 621
=============== =============== ==================== ===============
Investment Alluvial Gold
Mine Development Exploration and Other Mining Production
(Continuing) (Continuing) (Continuing) (Continuing) Total
6 months ended
30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue
Sale of gold bars - - - 972 972
Less: Cost of sales - - - - -
------------------ --------------- -------------- -------------------- ----------
Segment Gross profit - - - 972 972
------------------ --------------- -------------- -------------------- ----------
Other operating
income - - - 11 11
Non-operating income - - 494 - 494
Administrative and
operating expenses - (145) (825) (362) (1,332)
Project Costs - - (214) - (214)
------------------ --------------- -------------- -------------------- ----------
Segment result - (145) (545) 621 (69)
Other gain and losses - - - - -
Finance costs - - 89 4 93
------------------ --------------- -------------- --------------------
(Loss)/profit before
tax - (145) (456) 625 24
Tax - - - (52) (52)
------------------ --------------- -------------- -------------------- ----------
(Loss)/Profit for
the period - (145) (456) 573 (28)
================== =============== ============== ==================== ==========
Year 31 December Alluvial
2022 Investment Gold Mining
Mine Development Exploration and Other Production
(Continuing) (Continuing) (Continuing) (Continuing) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue
Sale of gold bars - - - 2,110 2,110
Less: Cost of - -
sales - - -
----------------- --------------- -------------- -------------- ----------
Segment Gross
profit - - - 2,110 2,110
Other operating
income - - 667 35 702
Administrative
and operating expenses (196) - (1,156) (1,686) (3,038)
Project Costs (127) - (1,289) (14) (1,430)
----------------- --------------- -------------- -------------- ----------
Segment result (323) - (1,778) 445 (1,656)
----------------- --------------- -------------- -------------- ----------
Other gains and - - - - -
losses
Finance income
/ (costs) (34) - 184 (40) 110
(Loss)/Profit
before tax (357) - (1,594) 405 (1,546)
Tax - - - (283) (283)
----------------- --------------- -------------- -------------- ----------
(Loss)/Profit
for the period (357) - (1,594) 122 (1,829)
================= =============== ============== ============== ==========
31 December
Balance Sheet 30 June 2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
Total Assets
Gold production 11,252 880 682
Exploration 8,277 9,728 8,792
Mining Development - 10,437 10,756
Investment & other 2,212 1,649 885
-------------- -------------- -------------
Total segment assets 21,741 22,694 21,115
============== ============== =============
Liabilities
Gold production (1,632) (371) (892)
Exploration (133) (459) (219)
Mining Development - - -
Investment & other (390) (614) (322)
Total segment liabilities (2,155) (1,444) (1,433)
============== ============== =============
The accounting policies of the reportable segments are the same
as the Group's accounting policies which are described in the
Group's latest annual financial statements. Segment results
represent the profit earned by each segment without allocation of
the share of profits of associates, central administration costs
including directors' salaries, investment revenue and finance
costs, and income tax expense. This is the measure reported to the
Group's Board for the purposes of resource allocation and
assessment of segment performance.
4. Tax
At 30 June 2023, the Group has no deferred tax assets or
liabilities and an income tax of GBPnil (2022: GBP52k) charge for
the period.
5. Revenue & Other revenue
An analysis of the Group's revenue is as follows:
Six months Year ended
ended
30 June 31 December
2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
Revenue from gold sales 393 972 2,110
393 972 2,110
---------------- ------------------------- -----------
Other revenue 1,669 --
1,669 --
-----
Other revenue relates to the 23% Net profit from its operations
in Mozambique.
6. Loss per share
The calculation of the basic and diluted loss per share is based
on the following data:
Six months ended Year ended
30 June 31 December
2023 30 June 2022 2022
Profit/ ( Losses) GBP'000 GBP'000 GBP'000
Profit/(Losses) for the purposes
of basic earnings per share being:
Net loss from continuing operation
attributable to equity holders of
the parent 621 (28) (1,829)
621 (28) (1,829)
-------------------------------- ----------------------------------- -------------
Number of shares
Weighted average number of ordinary
and diluted shares for the purposes
of basic earnings per share 856,375,115 847,000,046 849,532,192
(Loss)/profit per ordinary share
basic and diluted (pence) (0.07) (0.00) (0.22)
In accordance with IAS 33, the share options and warrants do not
have a dilutive impact on earnings per share, which are set out in
the consolidated income statement. Details of the shares issued
during the period as shown in Note 9 of the Financial
Statements.
7. Intangible assets
Development expenditure Mine Production
& Mineral exploration Total
GBP'000 GBP'000 GBP'000
=========================== ============================== =============== =======
As at 1 January 2023 19,418 - 19,418
=========================== ============================== =============== =======
Additions - at fair - - -
value (Manica)
Additions - at cost - - -
(Manica)
Transfer to Mine producing
asset (10,823) 10,823 -
=========================== ============================== =============== =======
Foreign exchange - (62) (62)
=========================== ============================== =============== =======
Additions - at fair - - -
value (Bushranger)
=========================== ============================== =============== =======
Additions - at cost
(Bushranger) 56 - 56
=========================== ============================== =============== =======
Foreign exchange (602) - (602)
=========================== ============================== =============== =======
As at 30 June 2023 8,049 10,761 18,810
=========================== ============================== =============== =======
Amortisation
As at 1 January 2023 - - -
Charge for the year - (202) (202)
As at 30 June 2023 - - -
=========================== ============================== =============== =======
Net Book value at
1 January 2023 19,418 19,418
=========================== ============================== =============== =======
Net book value at
30 June 2023 8,049 10,559 18,608
=========================== ============================== =============== =======
Mozambique
In March 2016, The Company acquired the Manica licence 3990C
("Manica Project") from Auroch Minerals NL. The Manica Project is
situated in central Mozambique in the Beira Corridor. At the time
of acquisition, the project had a JORC compliant resource of 900koz
(9.5Mt@ 3.01g/t) in situ, which has increased to 1.257moz (17.3Mt @
2.2g/t) following an independent technical report completed by
Minxcon (Pty) Ltd in May 2016.
Australia
In November 2020, the Company acquired the Bushranger
copper-gold project ("Bushranger Project") which comprises of four
exploration licences totaling 501km2, located in eastern central
New South Wales, Australia. The Bushranger Project hosts the
Racecourse deposit, a JORC (2012) compliant inferred resource
estimated at 71Mt @ 0.44% Cu and 0.064g/t Au using a 0.3% Cu
cut-off.
8. Property, plant and equipment
Cost or fair value on Mining plant Land & Buildings Furniture Total
acquisition of subsidiary & equipment & Fittings
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2023 65 - - 65
Additions - at cost 42 - - 42
Foreign exchange (2) - - (2)
-------------- ------------------ ------------- ---------
At 30 June 2023 105 - - 105
-------------- ------------------ ------------- ---------
Depreciation
At 1 January 2023 (25) - - (25)
Charge for the period (6) - - (6)
-------------- ------------------ ------------- ---------
At 30 June 2023 (31) - - (31)
-------------- ------------------ ------------- ---------
Net book value
At 30 June 2023 74 - - 74
-------------- ------------------ ------------- ---------
At 1 January 2023 40 - - 40
-------------- ------------------ ------------- ---------
9. Share capital
As at As at As at
30 June 30 June 31 December
2023 Number 2022 2022
Number Number
Deferred shares of 0.09p
each
As at 1 January 5,338,221,169 5,338,221,169 5,338,221,169
Issued during the period - - -
-------------- -------------- --------------
5,338,221,169 5,338,221,169 5,338,221,169
============== ============== ==============
Ordinary shares of 0.02p
each
As at 1 January 856,375,115 845,143,693 845,143,693
Issued during the period - 5,249,998 11,231,422
-------------- -------------- --------------
Outstanding as at 30
June 856,375,115 850,393,691 856,375,115
============== ============== ==============
No Ordinary Shares of 0.02p were issued during the period.
10. Cash flows from operating activities
Six month Six month Year ended
period ended period ended 31 December
30 June 2023 30 June 2022 2022
GBP'000 GBP'000 GBP'000
Profit/(loss) for the period 621 24 (1,546)
Adjustments for:
Continuing Operations
Depreciation of property, plant
and equipment 6 8 14
Amortisation of intangible assets 202 - -
Net Finance costs 70 (71) (3)
Impairment of intangible assets - - 938
Interest income (107) (23) (107)
Other (gains) /losses - - -
Share-based payments expense - - 248
-------------
Operating cash flows before
movements in working capital 792 (62) (456)
Decrease/(Increase) in inventories 6 162 52
(Increase)/decrease in receivables (1,223) (972) (677)
(Decrease)/increase in payables 723 (876) (1,467)
-------------
Cash (used in)/ generated from
operations 298 (1,748) (2,548)
Net finance costs 47 94 110
Tax (paid) (15) (7 8) (92)
Foreign currency exchange differences - - -
Net cash from/ (used in) operating
activities 330 (1,732) (2,530)
-------------- ------------- -------------
11. Related party transactions
There have been no changes to related party arrangements or
transactions as reported in the 2022 Annual Report.
Transactions between Group companies, which are related parties,
have been eliminated on consolidation and are therefore not
disclosed. The only other transactions which fall to be treated as
related party transactions are those relating to the remuneration
of key management personnel, which are not disclosed in the Half
Yearly Report, and which will be disclosed in the Group's next
Annual Report.
12. Subsequent events
Joint Venture Agreement
0n 24 August 2023 Xtract announced that it had entered into a
joint venture agreement with Cooperlemon Consultancy Limited
("Cooperlemon") in relation to the exploration for copper at large
scale exploration licenses 29123-HQ-LEL and 30459-HQ-LEL in
Northwest Zambia (the "Licences"). Under the joint venture
agreement ("JV Agreement"), Xtract has agreed the following key
terms:
Earn-in and Phase 1 exploration budget: Xtrac t will earn a 65%
interest in the joint venture by funding exploration expenditure
over an initial two-year period ("Phase 1") on the Licences of not
less than US$2 million. Exploration is expected to commence in Q4
2023 and will comprise both physical activity within the Licence
boundaries (including but not limited to mapping, soil
geochemistry, geophysics and drilling), and desktop studies,
laboratory analysis and interpretation of data and results. Xtract
anticipates funding this exploration expenditure from existing
resources and current ongoing operational activities.
If the Phase 1 exploration results are successful and prove the
continuity of mineralisation at grades suggesting the potential for
the future development of a Mineral Resource of not less than
500,000 tonnes of contained copper, consistent with economic
recovery at the depth of discovery with a minimum internal rate of
return of not less than 25% and a payback period not exceeding 42
months (including the recovery of capital expenditure), then there
will be a second two year exploration period ("Phase 2").
Phase 2 exploration budget : The Phase 2 exploration expenditure
of US$3 million will also be funded by Xtract who will be the
operator of the Licences for the duration of the Agreement.
Consequence of Trade Sale : If there is a trade or any other
sale of the Licences and / or the Joint Venture during Phase 1 of
the joint venture then Xtract will be deemed to have a 55% interest
in the Joint Venture. A sale requires the agreement of both Xtract
and Cooperlemon.
Mine Development : In the event that either or both of the
licences advance to a point where they are commercially viable and
suitable for development then the licences will be moved to a
corporate entity to be owned 75% by Xtract and 25% by Cooperlemon,
and it will be the responsibility of the newly formed corporate
entity to raise all capital for mine development and future
operations.
ENDS
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END
IR GCGDCIUDDGXC
(END) Dow Jones Newswires
September 29, 2023 06:10 ET (10:10 GMT)
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